Credit Card Rewards 101: A Guide to Earning Free Cash and Travel by Spending Wisely

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      Over the past 15 years, credit card rewards have provided my wife and me with thousands of dollars in free money—through cash, gift cards, and travel—simply by purchasing items we would have bought regardless. It’s straightforward. We try to maximize our spending on credit cards, while also signing up for new cards with appealing bonus offers. And because we pay off our balance in full every month, we've incurred no interest charges.

      Some people argue that banks and credit card companies are problematic. I find them to be beneficial, provided you use them wisely.

      In this free guide, I will cover:

      - Why Credit Card Rewards Matter

      - How Credit Card Rewards Function (and why 1% cash back isn’t a compelling offer)

      - How to Choose Which Cards to Apply For (and the frequency of applications)

      - How to Qualify for Business Credit Cards

      - Myths and Realities of Credit Scores

      - What Cards I Use and How I Monitor Them

      - Legitimate Methods to Meet Minimum Spending Requirements

      You might not consider credit card rewards a side hustle, but it has been a lucrative pastime for me for years. Every dollar counts!

      Here's the breakdown.

      Credit Card Rewards: Why They Matter to You

      Here are two reasons to pay attention to credit card rewards:

      - Free money

      - Complimentary travel

      These are two of my favorite things! In this complimentary course, I will reveal simple strategies to significantly boost the cash back you might currently be earning from your spending.

      In terms of travel, points and miles from credit cards have allowed my wife and I to enjoy thousands of dollars in free travel and additional perks over the years. We’ve traveled to Asia, multiple destinations in Europe, Mexico, and throughout the U.S. It’s often said that travel is the one purchase that enriches you—and plane tickets are what I love to buy most—but it’s even more enjoyable when you can acquire them for free.

      How Credit Card Rewards Function (and why 1% cash back isn’t a great deal)

      Most credit cards feature some form of cash back program, usually ranging from 1-2% on all purchases, and sometimes up to 5% for spending in specific categories. This incentivizes you to use their card over others you might have.

      If you maintain an average monthly expenditure of $1,150 on chargeable items such as food, gas, entertainment, and clothing (the national household average according to one report), you should be earning at least $138 a year in cash back rewards. While this isn't life-changing, it is free money.

      However, you can achieve much better returns. By spreading that average annual spending of $13,800 across a few cards with attractive sign-up bonuses, you could accumulate rewards equivalent to $1,000-$2,000. That's drastically higher than $138!

      Previously, I relied on just one or two cards and passively collected my 1-2% cash back. Knowing what I do now, it’s frustrating to think about the funds I missed out on. The real benefit arises when you take advantage of specific sign-up bonuses for new cards, yielding rewards equivalent to 20%, 30%, 40% cash back, or more in travel value or statement credit.

      For instance, the Chase Freedom® Flex℠ Credit Card currently provides a $200 sign-up bonus with a $500 spend in the first three months. This translates to a 40% cash back return, likely 30 times better than what you’re currently earning from your spending. If your household is anything like ours, spending $500 on your card within three months should be manageable. Plus, there’s no annual fee!

      In conclusion, 1% is rather weak; 40% is significantly better.

      Certainly, there's some strategy involved since you can't just open a new account each time you meet the $500 threshold. More on that below.

      How (and How Often) to Choose Rewards Cards

      Before diving into this process, you should be aware of a few “rules.”

      The 3-Month Cooling Off Period

      It’s advisable not to apply for credit cards in quick succession. Waiting at least three months between applications is wise. Each application impacts your credit score. If you apply for too much credit in a short timeframe, it can raise a red flag, negatively impacting your credit score and making it harder to get approved for future applications.

      Now, I’m not claiming I have never violated this rule, but treat it as a guideline or best practice.

      The 5/24 Rule

      The 5/24 rule is relevant to rewards credit cards issued